Why Moving Your Stop-Loss Makes Losses Worse

You set a stop at $58,000. Price drifts down to $58,200, and you feel it coming. So you do the reasonable thing. You give it a little room. Move the stop to $57,000. The trade needs space to breathe, right?

That was the moment you lost. Not when price hit your original stop. When you decided your stop was a suggestion.

Here's the thing about a stop-loss you can move: it isn't a stop-loss. It's an intention. And intentions have a terrible track record under pressure. A real stop is a decision you made once, in a calm state, that the market executes whether you like it or not. The second you can override it mid-trade, you've handed the exit back to the version of you that's least equipped to make it — the one currently watching the position bleed and looking for reasons to hope.

Loss aversion is the...

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